Market Update- January 6, 2020
The Week on Wall Street
Stocks descended from record highs Friday, as traders reacted to a U.S. drone strike that killed Iran’s top military officer. Oil prices rose more than 3% following the breaking news.[i]
Wall Street benchmarks ended up having a sideways week, shortened by the New Year’s Day holiday. The Dow Jones Industrial Average lost 0.04% across four trading sessions; the S&P 500, 0.16%. In contrast, the Nasdaq Composite rose 0.16%. The MSCI EAFE index, benchmarking developed overseas stock markets, added 0.30%.[ii],[iii]
Oil Takes Center Stage
WTI crude oil settled at $63.07 a barrel on the New York Mercantile Exchange Friday, down from an intraday peak of $64.09 (which was its highest price since April).
The commodity rallied Friday, as energy traders considered the possibility of supply disruptions in the Middle East in retaliation for last week’s U.S. air strike.[iv]
Manufacturing Activity Declines
At the start of each month, economists watch the Institute for Supply Management’s Purchasing Managers Index for the factory sector, which is considered a key barometer of U.S. manufacturing health.
Last week, ISM announced a December reading of 47.2 for this index, the poorest in more than ten years. A reading below 50 indicates manufacturing activity is contracting rather than expanding.[v]
THE WEEK AHEAD: KEY ECONOMIC DATA
Tuesday: The Institute for Supply Management presents its December Non-Manufacturing Purchasing Managers Index, gauging the pace of activity in the U.S. service sector.
Wednesday: Payroll processor ADP releases its December national private-sector employment report.
Friday: The December jobs report from the Department of Labor.
THE WEEK AHEAD: COMPANIES REPORTING EARNINGS
Wednesday: Constellation Brands (STZ), Lennar (LEN), Walgreens Boots Alliance (WBA)
Friday: Infosys (INFY)
[i] https://www.investors.com/market-trend/stock-market-today/dow-jones-dives-us-airstrike-gold-prices-oil-prices-jump-tesla-stock/
[ii] https://www.wsj.com/market-data
[iii] https://www.wsj.com/market-data/quotes/index/XX/990300
[iv] https://www.reuters.com/article/us-global-markets/oil-safe-havens-surge-after-u-s-strikes-kill-iran-commander-idUSKBN1Z2042
[v] https://www.marketwatch.com/story/us-manufacturing-slumps-worsens-in-december-as-ism-index-falls-to-10-year-low-2020-01-03